SPRINGFIELD – Organizations that provide home and community-based services for low-income, elderly and disabled people in Illinois told lawmakers Wednesday the reimbursement rates they receive through the state’s Medicaid program do not cover their cost of providing services.

Some might go out of business if they don’t see substantial rate increases soon, they warned.

“Providers in all fields report that current rates fail to keep up with the pace of actual costs of basic operational and administrative support needed to stay in business,” Judith Gethner, executive director of Illinois Partners for Human Service, told a Senate budget committee. “Of course, most have little choice but to accept the contracts.”

The committee is considering a batch of bills, each of which would increase reimbursement rates for one category of providers. They include home health aides, community mental health centers, adult day care providers for the elderly and disabled, assisted living centers and children’s health care centers and alcohol and drug abuse treatment centers, among others.

Most of those services are designed to enable people to continue living in their homes rather than being institutionalized in more expensive nursing home settings. Others, like children’s health care centers, provide intermediate-level health care for those who are not yet ready to return home, but do not need to continue staying in more expensive hospitals.

Most are also eligible for Medicaid reimbursements, which in Illinois means the federal government picks up half the cost.

Some of those providers said they have not had a rate increase in 15 years or more, and that the reimbursements they now receive do not even cover the cost of the services they provide. Meanwhile, they added, as costs have been rising, funding for human services as a share of the state’s total budget have been shrinking as the state has been forced to increase funding for things like pension obligations, debt service and K-12 education.

“The solution is to increase the piece of the pie that goes to human services,” Gethner said. “After years of stagnant reimbursement rates, it’s imperative to increase these rates and grants so the sector can design and implement services.”

Cindy Cunningham, president of the Illinois Adult Day Services Association, said the facilities she represents have not seen a rate increase in 10 years. As a result, many have gone out of business.

“Costs have gone up significantly in that time,” she said. “During the last four years, we’ve lost approximately 20 adult day centers. It’s not available across Illinois anymore. We’re going to lose another one this month. A notice was given to the Department on Aging that they could no longer continue services.”

Sara Howe, CEO of the Illinois Association for Behavioral Health, whose members provide services to treat addiction and other mental health issues, said Illinois has seen a dramatic increase in the need for those services in recent years, and the state’s low reimbursement rates have made it difficult to recruit providers.

“In Illinois, 85 of our 102 counties have been designated as health professional shortage areas for mental health services,” she said. “Between 2017 and 2018, our shortage of behavioral health care professionals increased by over 200 percent. Our hospitalization rates for adults with serious mental illness are 1.5 times higher than the national average. … We are also the fifth worst state in the nation for binge drinking for adults, with higher areas in rural and suburban areas for excessive drinking.”

The bills pending in the budget committee would only authorize higher reimbursement rates for various services. Actual funding to pay those rates would have to be included in the final budget bills that lawmakers are expected to pass at the end of the month.

Although Democratic Gov. J.B. Pritzker has proposed increased funding for some social services, many of the bills in the Senate seek increases above and beyond the governor’s request. Few of the people who spoke on behalf of those bills were able to provide reliable estimates of how much they would cost, something that made Sen. Dale Righter, the Republican spokesman on the committee, grow impatient.

“Counting today (Wednesday), there are 16 session days left. It’s time to start adding numbers up,” Righter, of Mattoon, said.

Lawmakers are scheduled to adjourn the session May 31.

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